Stewart v. Am. Ass'n of Physician Specialists, Case No. 5:13-cv-01670-ODW(DTBx)
| Decision Date | 27 May 2014 |
| Docket Number | Case No. 5:13-cv-01670-ODW(DTBx) |
| Parties | PATRICIA STEWART, D.O., Plaintiff, v. AMERICAN ASSOCIATION OF PHYSICIAN SPECIALISTS, et al., Defendants. |
| Court | U.S. District Court — Central District of California |
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I. INTRODUCTION
On February 20, 2014, Defendants filed Motions to Dismiss many of Plaintiff Patricia Stewart's claims for declaratory relief, unfair business practices, breach of fiduciary duty, defamation, intentional interference with prospective economic advantage, and indemnification for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). (ECF Nos. 47, 49.) For the reasons discussed below, the Court GRANTS IN PART AND DENIES IN PART the Motions to Dismiss.1
II. FACTUAL BACKGROUND
Stewart is a licensed physician specializing in dermatology. (Compl. ¶ 3.) AAPS is a Florida not-for-profit corporation that certifies physicians in various medical specialties. (Id. ¶¶ 4-5.) AAPS certification confers the honor, credibility, rights, and privileges of a qualified medical specialist—and consequently, lucrative career opportunities for physicians. (Id. ¶ 5.) AAPS has several subspecialty academies for physicians specializing in different areas of medicine, including the American Academy of Specialists in Dermatology ("AASD"). (Id. ¶ 7.)
Stewart participated in and completed the AAPS training-certification program. (Id. ¶ 31.) During the training, Stewart filed a sexual-harassment charges against her AAPS trainers. (Id.) Stewart asserts that AAPS retaliated against her for filing charges by refusing to recognize Stewart's participation in AAPS's training program, which prevented her from sitting for the dermatology board certification. (Id.) Ultimately, Stewart filed a discrimination charge against AAPS with the EEOC. (Id. ¶ 33.) After two years, AAPS agreed to allow Stewart to sit for the dermatology certification exam. (Id. ¶ 34.)
Stewart also asserts that AAPS created a hostile work environment for her as a member because officers circulated pornographic and racially biased emails. (Id. ¶¶ 47-48.) Stewart alleges that the distribution of these inappropriate emails, as well as other alleged AAPS misconduct, prompted several physicians to investigate these matters. (Id. ¶ 54.) She avers that AAPS retaliated against these physician-whistleblowers by obtaining access to confidential emails and using this information as evidence to suspend them. (Id. ¶¶ 55-56.)
Stewart contends that when she called for the physician-whistleblowers' reinstatement, AAPS took several adverse actions against her. First, Stewart alleges that AAPS filed a meritless defamation lawsuit2 against Stewart and another physicianin the Thirteenth Judicial Circuit for Hillsborough County, Florida, in Case No. 11004947 ("the Florida Action"), alleging that Dr. Stewart was part of a conspiracy to destroy AAPS. (Compl. ¶ 61.) Second, on March 26, 2012, AAPS removed Stewart from her elected position as AAPS Governor. (Id. ¶ 62; Ex. Q.) Third, on March 28, 2012, Defendants Stephen Montes, Robert Cerrato, Bart Maggio, and Joseph Gallagher allegedly sent out an email that falsely accused Stewart of campaigning to destroy AAPS. (Id. ¶ 63, Ex. S.) Fourth, on May 30, 2012, Defendants Susan Slominski, Svetlana Rubakovic, Thomas Balshi, Lori Honeycutt, Robert Ilowite, and Ken Wallace allegedly sent another similar defamatory email. (Id. ¶ 64, Ex. T.)
Stewart alleges that on May 30, 2012, Cerrato and the members of the Disciplinary Committee—Montes, Wallace, and Maggio—used the defamatory letters as a pretext to terminate Stewart's membership in AAPS for "conduct injurious to, and not in the best interests of AAPS," without notifying her of the meeting or providing her an opportunity to present evidence in her defense. (Id. ¶ 66, Ex. V.)
Stewart contends that the AAPS Board of Directors offered to permit her to present evidence in her defense at a June 9, 2012 meeting—after the Board had already voted to terminate her membership. (Id. ¶ 67.) The special meeting was held in Tampa, Florida, and Stewart was not permitted to appear telephonically. (Id.) Stewart further alleges that Cerrato prevented Stewart from attending the annual AAPS meeting held on June 25, 2012, in Marina Del Rey, California. (Id. ¶ 69.) Stewart asserts that at the AAPS annual meeting held in California, Defendants Cerrato and William Carbone made a presentation to the entire AAPS membership in which they falsely stated that Stewart had authored and published a subversive Internet blog. Stewart alleges that the false attribution harmed her reputation within the organization. (Id. ¶¶ 71-72.)
On September 16, 2013, Stewart filed suit against AAPS and 16 individual defendants who are part of AAPS's Board of Directors. (ECF No. 1.) Stewart alleges claims for (1) declaratory relief to set aside termination of her membership; (2) sexdiscrimination and retaliation in violation of 42 U.S.C. § 2000 et seq.; (3) violation of California Civil Codes section 51 and 52; (4) violation of California Government Code section 1294(h); (5) unfair business practices in violation of California Business & Professions Code section 17200; (6) breach of fiduciary duty; (7) defamation; and (8) intentional interference with prospective economic advantage; and (9) indemnification. (ECF No. 1.) On February 20, 2014, Defendants filed motions to dismiss Stewart's claims. AAPS moves to dismiss Stewart's first, fifth, sixth, seventh, eighth, and ninth claim for relief. (ECF Nos. 47.) The individual defendants move to dismiss Stewart's fifth, sixth, seventh, and eighth claim for relief. (ECF Nos. 49, 53, 55.) These motions are now before the Court for decision.
III. LEGAL STANDARD
A court may dismiss a complaint under Rule 12(b)(6) for lack of a cognizable legal theory or insufficient facts pleaded to support an otherwise cognizable legal theory. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1990). To survive a dismissal motion, a complaint need only satisfy the minimal notice pleading requirements of Rule 8(a)(2)—a short and plain statement of the claim. Porter v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). The factual "allegations must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). That is, the complaint must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
The determination whether a complaint satisfies the plausibility standard is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 679. A court is generally limited to the pleadings and must construe all "factual allegations set forth in the complaint . . . as true and . . . in the light most favorable" to the plaintiff. Lee v. City of L.A., 250 F.3d 668, 688 (9th Cir. 2001). But a court need not blindly accept conclusory allegations,unwarranted deductions of fact, and unreasonable inferences. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001).
As a general rule, a court should freely give leave to amend a complaint that has been dismissed. Fed. R. Civ. P. 15(a). But a court may deny leave to amend when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir.1986); see Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).
IV. DISCUSSION
The Defendants move to dismiss Stewart's claims for declaratory relief to set aside termination of her membership, unfair business practices, breach of fiduciary duty, defamation, intentional interference with prospective economic advantage, and indemnification for various individual reasons. The Court addresses each in turn.
Stewart's first claim for relief seeks a declaration from this Court that she has remained an AAPS member in good standing. (Compl. ¶ 83.) Stewart alleges that AAPS failed to give her sufficient notice prior to terminating her membership. (Id. ¶ 80.) As such, she requests that this Court set aside and render void AAPS's disciplinary actions made in violation of their bylaws. AAPS moves to dismiss Stewart's declaratory-relief claim as untimely.
Because AAPS is a not-for-profit corporation incorporated in Florida, it is subject to Florida law. Under Florida law, membership in a not-for-profit corporation may not be terminated or suspended "except pursuant to a procedure that is fair and reasonable and is carried out in good faith." Fla. Stat. Ann. § 617.0607(1). A proceeding challenging "an expulsion, suspension, or termination, including a proceeding in which defective notice is alleged, must be commenced within 1 year after the effective date of the expulsion, suspension, or termination." Id. at § 617.0607(3).
Stewart alleges that AAPS failed to follow AAPS Bylaw section 3.05 in terminating her membership. (Compl. ¶ 81.) Stewart alleges that she was notified of her May 30, 2012 membership termination by way of a June 18, 2012 letter—thus she was not provided with the proper 30-day written notice. (Id. ¶ 82, Ex. V.) Stewart then filed suit against AAPS on September 16, 2013—over a year later. (ECF No. 1.) In the meager four sentences Stewart devotes to this argument, she argues that AAPS bylaws state that membership termination is not final until the member's internal appeal rights have been exhausted by presenting the member's case to an appeal board made up of past presidents. (Opp'n 21.) She asserts that it was not until March or April of 2013 that she realized that AAPS would not provide her with her appeal rights.
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